MFs can provide advisory to certain categories of FPIs

These should be appropriately regulated entities, says watchdog SEBI

The Securities and Exchange Board of India (SEBI) has permitted mutual fund houses to provide management and advisory services to certain categories of foreign portfolio investors (FPIs).

In a circular issued on Monday, the capital markets regulator said that asset management companies (AMCs) can provide such services to FPIs that fall under the category of sovereign wealth funds, pension funds, central banks, and multilateral organisations, among others.

“Government and government-related investors such as central banks, sovereign wealth funds, international or multilateral organisations or agencies including entities controlled or at least 75% directly or indirectly owned by such government and government related investor,” the circular said.

SEBI has also permitted AMCs to provide management and advisory services to those FPIs that are “appropriately regulated entities such as pension funds, insurance or reinsurance entities, banks and mutual funds”, and also those entities wherein these categories hold more than 50% share.

In October, the capital markets regulator had amended the mutual fund regulations to allow such services by fund houses to such categories of FPIs that are specified by the watchdog. Earlier, it was only limited to Category I FPIs.

For fund houses that are currently offering management and advisory services, to entities that do not fall under these categories, the regulator has allowed such services to be continued till the period mentioned in the agreement, or one year, whichever is earlier.

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Printable version | Apr 3, 2020 4:27:17 AM |

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